Contracts bring big business for well-connected Stafford firm

By Ericka Mellon |
April 14, 2012
| Updated: April 23, 2012 11:18am

A little-known Stafford-based business has received tens of millions of dollars in taxpayer money as its executives eased into political circles, handing out big-dollar campaign contributions and hiring well-connected employees and contractors.

Fort Bend Mechanical, once a small heating and air-conditioning company catering to high-rise buildings, has prospered in recent years off government construction contracts. The biggest came from the Houston Independent School District and Houston Community College.

The company's payroll has read at times like a who's who of public officials or their relatives and campaign staff.

In the competitive arena for public contracts, Fort Bend Mechanical's political connections are prompting calls for reforming campaign finance and conflict-of-interest rules. The company also is a target of a lawsuit filed by a competitor alleging bribery and favoritism in Houston ISD.

Fort Bend Mechanical has hired, as employees or contractors, HCC trustee Chris Oliver, HISD trustee Larry Marshall's grandson and his longtime campaign treasurer, and Fort Bend County Commissioner Grady Prestage's son, according to interviews and public records. The hires came near or during the times the company was doing business with the affiliated public entity.

The director of operations for Stafford schools also moonlighted for Fort Bend Mechanical while he was on the district payroll and the company was doing business with the school district. After he was fired this year, the company hired him.

Even if a business does good work for a fair price, taxpayers' trust can be lost due to perceptions of favoritism in government contracts, ethics watchdogs say.

"Simply because these practices are not illegal does not mean they don't raise issues of grave concern," said Craig Holman, government affairs lobbyist for the watchdog group Public Citizen. "It appears this contractor is using every tool under the sun for winning these government contracts."

Former HISD Superintendent Abelardo Saavedra said he thinks the school board and state should limit campaign contributions from vendors.

"I don't know that a couple hundred dollars is going to influence someone, but several thousand dollars could possibly influence people," he said.

Saavedra recalled that multiple board members, whom he declined to name, spoke to him favorably about Fort Bend Mechanical. Trustees Marshall and Greg Meyers, who each received more from the company than other trustees, said they never asked Saavedra to support a specific vendor.

David "Pete" Medford, owner of Fort Bend Mechanical, said he donates to support good leaders and wrote a $25,000 check to Marshall's campaign in 2009 because of a tight runoff election.

Business boomed for Fort Bend Mechanical last year, with gross sales exceeding $29 million, Medford said. He and his wife and business partner, Sharon, recently built a home in Richmond that was last appraised at $3.5 million.

Since 2008, HISD and HCC have paid Fort Bend Mechanical $37 million, records show. The company also has done more than $8.6 million in business with Texas Southern University, the University of Houston, Fort Bend County, the Fort Bend and Stafford school districts, and the cities of Sugar Land and Houston.

While Fort Bend Mechanical continues to land HISD projects, largely due to its low bids, the Stafford and Fort Bend school districts abruptly cancelled their contracts with the company this year after questioning its performance, emails show.

Medford said his company has performed well and landed jobs through a fair process - scoring high in bid evaluations.

"As far as I can see, there's been no favoritism," Medford said.

Medford, his wife and his son, a vice president at the company, have contributed at least $139,750 to HISD board members, HCC trustees, Fort Bend County commissioners and Fort Bend school trustees since 2008.

Link to Stafford schools

Jimmy Webster, director of operations for Stafford schools, was fired in January after the newly hired superintendent, Lance Hindt, questioned him about potential conflicts of interest. Five months earlier, the Stafford school board had voted unanimously to give Fort Bend Mechanical a $1 million contract to build a new maintenance building. Webster told the board the company offered a good price, and a chart provided by the district shows it was the cheapest of four firms.

Webster later acknowledged he stayed once at a Surfside beach house owned by the Medfords and worked for Fort Bend Mechanical on the side on a district-funded project.

Webster's company, J. Webster Services, received $26,622 from Fort Bend Mechanical in 2007 and 2008 for doing light fixture work in Stafford schools, according to district records. Webster said he personally earned $4,302 after expenses.

Medford said he has known Webster for 15 years. In his new job at Fort Bend Mechanical, Wester will oversee renovations at two HISD schools, Medford said.

Lawsuit filed

Fort Bend Mechanical landed in the headlines last year when a bribery lawsuit filed by a competing company said HISD trustee Marshall failed to report a $25,000 campaign contribution from Medford. Marshall said his 15-year campaign treasurer, Joyce Moss-Clay, made an innocent mistake. He said he plans to share records with the Texas Ethics Commission to prove the check was deposited and not misappropriated.

According to documents uncovered during the lawsuit, Moss-Clay was a consultant for Fort Bend Mechanical, earning $3,000 a month at times.

Medford explained last week that he hired Moss-Clay, a retired HISD facilities administrator, to coordinate a charitable program for his company to donate money to the cash-strapped schools where it does work.

"Our goal is to give back to each school," he said.

Marshall reported in court filings that he and Moss-Clay have had a long-standing business relationship doing consulting work for one another.

In an interview, Marshall confirmed that his grandson worked an entry-level job at Fort Bend Mechanical more than a year ago before enrolling in college. Marshall said he did not help him land the job.

State law and HISD's conflict policy only require elected officials to disclose when their spouses, children or parents earn significant income from a vendor.

Medford said he did not know that Marshall's grandson worked for him until the Houston Chronicle asked. The grandson earned $10 an hour and worked at HISD's Long Middle School, Medford said later.

One of Marshall's campaign workers, Earl Jimmison, has consulted for Glennlock Construction, which was a subcontractor for Fort Bend Mechanical on the $10 million renovation at Long. That project ran behind schedule and shoddy work had to be corrected, said HISD's general manager of construction, Issa Dadoush.

Residential work

Fort Bend Mechanical rarely does residential jobs, but Medford confirmed his staff installed a new generator at Moss-Clay's house and did electrical work at the Missouri City home of Prestage, a longtime Fort Bend commissioner whose son, Dustin, works for the company.

"Pete told me he was looking for an architect and so I mentioned (that) to my son," Prestage recalled. "My son followed up with him, and he hired him."

Medford said Prestage has nearly finished paying for the house work in installments and that Moss-Clay already paid.

Mike Dillon, a former master electrician at Fort Bend Mechanical, said he remembers Medford calling him into his office, shutting the door and telling him to fix Moss-Clay's generator problem.

"He said that a very important person to him, Ms. Joyce, has got a generator that somebody put in and it don't work right. 'I want you to go look at it. I want you to tell me what she needs,' " said Dillon, who was let go from Fort Bend Mechanical

Medford said he considered the issue important because Moss-Clay was upset but he didn't drop other jobs to help her.

Work with HCC

Fort Bend Mechanical landed its first major contract with HCC after trustee Oliver made a motion in November 2008 to move the company from the sixth-ranked firm to the top three. His fellow trustees supported the move to go against the administration's top picks.

Oliver said later that he advocated for Fort Bend Mechanical based in part on HCC Deputy Chancellor Art Tyler telling him that the company recently had helped the college after Hurricane Ike. Tyler did not respond to a request for comment.

Oliver, who runs a construction cleanup company, said he did not know Medford at the time.

Within four months, Fort Bend Mechanical made its first payment to Oliver's company - $5,000 for work at its new office building and at an HISD school, according to records.

Medford said the company appealed to him because it was minority-owned (Oliver is black). Some government projects require minority participation, and Medford says he likes to help small businesses grow. Medford also used Oliver's crew during the building of his new house.

Oliver, who filed a conflict disclosure form after being notified by the college's attorney, abstained from a vote to hire Fort Bend Mechanical in February 2010. In a 6-2 vote, the trustees again selected vendors, including Fort Bend Mechanical, in a different order than the administration's ranking.

The next month, the Medfords contributed a total of $20,000 to HCC trustees Neeta Sane and Michael Williams, who voted with the majority. The family donated $10,000 to trustee Sandie Mullins five months earlier, and recently gave $22,000 to new trustee Carroll Robinson, who is lobbying for ethics reform.

Fort Bend Mechanical, started in 1998, has grown to about 100 employees, and Medford estimates adding another 100 to handle more projects. Despite record sales last year, Medford said, the company finished in the red due in part to the problems at Long Middle School.

"It was a big gamble going into the general contracting business," he said. "It's not all champagne and everything."